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Gold eases as Iran tensions keep rate-hike fears alive

Gold is down 0.9% for the day and hovers near $4,025, after a June PPI drop helped temper immediate Fed hike bets.

Reported · Written up by our desk · Major Pairs

Gold prices have slipped in early European trade, holding near the lower end of the daily range around $4,025, down about 0.85% on the day, as investors weigh easing US inflation signals against renewed energy and rate risks.

FXStreet links the move to a mix of data and oil, noting that the US Bureau of Labor Statistics said June producer prices fell 0.3% after a revised 0.6% rise the month before, and that the year-over-year rate eased to 5.5% from 6.0%. The report added to evidence of cooling price pressure, with traders trimming expectations for a near-term Fed hike.

At the same time, oil prices remain elevated near a one-month high amid escalating US-Iran tensions, and that has revived worries about energy-driven inflation. FXStreet points to the US carrying out another round of airstrikes against Iran, followed by Iranian drone and missile attacks on US-linked facilities, plus threats involving potential targeting of critical Iranian infrastructure.

With the prospect of at least one 25 basis point Fed rate hike in 2026 gaining renewed support, the US dollar has been supported and inflows have stayed away from non-yielding bullion. FXStreet adds that the outlook for XAU/USD remains bearish while it trades below the 200-day simple moving average, with a potential test of levels below $4,000.

Latest closeGold $4,067.10 ▲0.1%

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